What is SIP (Systematic Investment Plan) ?
Systematic Investment Plan, commonly known as SIP is an investing channel initiated by Mutual Funds, under which one can invest a fixed amount at predetermined time intervals in Mutual Fund Scheme. Such an amount is generally invested every month, but it could be invested once a week, once in a quarter, half-yearly, or even annually. The system of SIP can be easily understood as a recurring deposit under which a certain fixed amount is deposited on a specific date for a predetermined time period.
The popularity of SIP among people, especially youngsters has increased in recent years as it offers an investing platform with a minimum amount of ₹500 and also promotes discipline in investing habits. SIP does not demand separate time and attention from investors as the amount is directly deducted from their bank account. Mutual Funds and Portfolio Investment further minimise the risk associated with SIP, making it a time and risk-efficient channel.
Table of Content
- How does SIP Work?
- Features of Systematic Investment Plan
- Benefits of Investing in SIP
- SIP vs Lump sum
- Factors to Consider While Starting SIP